The part
of the Help to Buy scheme designed to help first-time buyers with only a 5%
deposit to put down has now finished, but there are still deals available to
help people with smaller deposits.

The
mortgage guarantee element of Help to Buy was originally set up to boost 95%
lending. As its name suggests, the scheme provided a government guarantee to
lenders prepared to lend up to 95% of the property value.

The
guarantee meant that the government would compensate lenders, to help reduce
their risk.

The
scheme proved successful, encouraging more lenders to offer mortgages to those
with only a 5% deposit to put down. Some lenders introduced 95% mortgages even
without the guarantee.

The
impact for first-time buyers has therefore been positive, and has given them
access to a much wider choice of 95% deals, with some major lenders maintaining
the rates they offer even now the scheme has ended.

Average
rates on 95% deals have also fallen, although buyers must meet affordability
criteria to qualify.

Those who
manage to save larger deposits will have far more mortgage options available to
them, but broadly it is a healthier market for homebuyers, whatever size
deposit they have.

Halifax, one of Britain’s biggest lenders, has recently relaxed
the criteria borrowers are required to meet if they want an interest-only
mortgage.

With this type of mortgage, as the name suggests, you only
repay the interest on the amount you’ve borrowed each month. The capital must
be repaid when the mortgage term ends.

Homeowners used to need a minimum £1million pension pot to
be eligible for an interest-only mortgage with Halifax.

Now they only need to prove they have a pension which will
reach £400,000 by the time they retire.

They can also sell their home as a means of paying back what
they owe. To be eligible, however, homeowners must have an income of £100,000
or more, or £150,000 if applying as a couple. They must also have at least
£200,000 equity in the property.

Interest-only deals were very popular prior to the credit
crunch, but lenders have since made it harder to qualify for this type of loan.

Most lenders do still offer interest-only mortgages, but may
impose eligibility requirements. For example, Virgin Money will lend on an
interest-only basis to borrowers with a joint income of £50,000, while NatWest requires
a minimum income of £100,000.

Changes such as those made by Halifax show that lenders are
re-assessing their approach to interest-only, although borrowers will still
need to demonstrate a repayment plan to ensure it’s appropriate.

First-time buyers aged
between 23 and 40 may soon be able to buy a new home at a discount of a least
20% below market value, under the government’s ‘Starter Home’ initiative.

The properties will
start being built this year, the housing minister Gavin Barwell confirmed at
the beginning of the New Year, with an initial group of 30 local authority
partnerships leading the schemes.

Funding will be
supported by the government’s £1.2 billion Starter Homes Land fund, which was
established last April.

The fund was set up
to assist the aim of building 200,000 Starter Homes by 2020 on brownfield sites
in England, such as those currently or previously used for commercial or
industrial purposes.

However, critics of
the scheme claim that as the maximum price after the discount has been applied
will be £250,000 outside London and £450,000 in the capital, the new properties
won’t be affordable for many first-time buyers.

It’s expected that
they won’t be able to sell on or let their Starter Homes at their open market
value for a period of at least five years after the initial sale.

Increased competition between lenders has seen the number of
fee-free fixed rate mortgages more than double over the past twelve months.

According to recent data from Moneyfacts, there were 556
fee-free deals just over a year ago, compared to 1,162 by the end of 2016.

Although the number of fee-free deals has increased, average
fixed rate fees have gone up by £30 from £954 to £984 over the past year. The
average two-year fixed rate, however, has fallen from 2.67% to 2.34% in the
last 12 months, which suggests some lenders are introducing lower rates but
with higher fees.

Fee-free mortgages usually have slightly higher rates than
those which do charge a fee, but they often still work out to be more
cost-effective overall once fees are factored in.

Calculations show that borrowers with a 25% deposit opting
for the lowest two-year fixed rate deal with a fee could be more than £1,000
worse off than if they’d gone for a deal with no fee.

It’s important that when comparing deals, borrowers always
look at the total cost, rather than just the headline rate of interest charged.

Every seller is tempted to overprice their home. They may
have carried out lots of work over the years or may need the extra money to
trade up.

Buy as a buyer, you want to pay the market price.

So how do you spot an overpriced home? Here are our top five
tips.

Number one

How long has it been on the market?

If it’s more than 60 days, chances are that it is not
selling because it’s overpriced. Though be aware that some high-end homes can
be on sale for a longer period.

Number two

Have home improvements inflated the price?

If an owner has just spent a lot of money on an extension or
refurbishment, they may price their home higher because they want to make a
profit. But love and investment in a home doesn’t always get a reward.

A home in poor condition should not try to compete with a newly
refurbished home on the same street, either.

Number three

Does it match the value of other properties nearby?

If the house next door recently sold for a fraction of the
one you are viewing, something isn’t right.

Take a look at current listings and properties that were
recently sold in your postcode area to compare. Remember, the asking price
isn’t the same as the sold price, but previously sold prices could guide you
towards a good offer.

Number four

Do your research

Always do your homework. At the Guild, we recommend looking
at lots of online resources, from mortgage advice to solicitor reviews. Getting
things in order now will save time and stress down the line.

Number four

Is the location desirable?

Similar properties can vary in price hugely from one side of
town to the other. The trendiest place is always going to fetch a higher price,
so keep that in mind.

The best solution is to set the price sensibly. Sometimes a
low price may generate more interest. If in doubt, talk to your agent.

You can get more information on overpriced homes on the
Guild’s blog online, as well as lots of other topics to help you with buying
and selling.

Contact us

Ensum Brown110 High StreetWareHertfordshireSG12 9APUnited Kingdom

Tel: 01920 412200Email: ware@ensumbrown.com

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About us

Ensum Brown have been marketing and selling properties in Ware and Hertford for over 30 years. Customer service is at the heart of everything with do, combining this with our three decades of experience and marketing flare enables us to get the very best price for our clients, whilst making the process as hassle and stress free as possible.